This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.theguardian.com/business/2015/jun/07/investigation-into-isoft-co-founder-dropped-by-regulators
The article has changed 3 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Investigation into iSoft co-founder dropped by regulators | Investigation into iSoft co-founder dropped by regulators |
| (about 2 hours later) | |
| A disciplinary investigation into Patrick Cryne, the multimillionaire co-founder of iSoft, the NHS software supplier at the centre of a fraud scandal a decade ago, has been quietly dropped by accountancy regulators. | A disciplinary investigation into Patrick Cryne, the multimillionaire co-founder of iSoft, the NHS software supplier at the centre of a fraud scandal a decade ago, has been quietly dropped by accountancy regulators. |
| Two years ago the Financial Reporting Council (FRC), which has powers to fine and strike off accountants found to have breached professional standards, resurrected its probe into the conduct of Cryne after criminal charges against him were dropped by the Financial Conduct Authority. | Two years ago the Financial Reporting Council (FRC), which has powers to fine and strike off accountants found to have breached professional standards, resurrected its probe into the conduct of Cryne after criminal charges against him were dropped by the Financial Conduct Authority. |
| A lawyer for Cryne told the Guardian his client had received a letter from the FRC formally closing the investigation as long ago as May last year. He said the investigation had resulted in no fine or other sanction against the former iSoft boss. “The matter is closed so far as the FRC and Mr Cryne are concerned,” he said. Cryne has always denied wrongdoing. | A lawyer for Cryne told the Guardian his client had received a letter from the FRC formally closing the investigation as long ago as May last year. He said the investigation had resulted in no fine or other sanction against the former iSoft boss. “The matter is closed so far as the FRC and Mr Cryne are concerned,” he said. Cryne has always denied wrongdoing. |
| The FRC has spent years reviewing the past affairs of iSoft, poring over one of the biggest accounting scandals at a stock market company in modern times. It has already issued fines against iSoft’s former auditor RSM Robson Rhodes, a firm since taken over by Grant Thornton, and against a junior figure in the iSoft’s fiance department. | The FRC has spent years reviewing the past affairs of iSoft, poring over one of the biggest accounting scandals at a stock market company in modern times. It has already issued fines against iSoft’s former auditor RSM Robson Rhodes, a firm since taken over by Grant Thornton, and against a junior figure in the iSoft’s fiance department. |
| Last week the accountancy regulator published disciplinary complaints against two of Cryne’s former colleagues Tim Whiston and John Whelan, both of whom once served as iSoft finance directors. | Last week the accountancy regulator published disciplinary complaints against two of Cryne’s former colleagues Tim Whiston and John Whelan, both of whom once served as iSoft finance directors. |
| The FRC has never disclosed it has dropped an investigation into Cryne. When asked about the decision, a spokesman for the FRC refused to comment. Cryne, best known outside of business circles as co-owner of Barnsley football club, had been a driving force behind the explosive growth of the NHS IT supplier company, which had rocketed to a value of more than £1bn just five years after floating on the stock market in 2000. Between 2001 and 2005 he made £41m from selling iSoft shares. | The FRC has never disclosed it has dropped an investigation into Cryne. When asked about the decision, a spokesman for the FRC refused to comment. Cryne, best known outside of business circles as co-owner of Barnsley football club, had been a driving force behind the explosive growth of the NHS IT supplier company, which had rocketed to a value of more than £1bn just five years after floating on the stock market in 2000. Between 2001 and 2005 he made £41m from selling iSoft shares. |
| But in 2006 iSoft issued a huge profit warning, after discovering “accounting irregularities” affecting several previous years, later calling in criminal authorities to investigate. Shares lost more than 90% of their value before the company was bought by Australian rival IBA Health in 2007. | But in 2006 iSoft issued a huge profit warning, after discovering “accounting irregularities” affecting several previous years, later calling in criminal authorities to investigate. Shares lost more than 90% of their value before the company was bought by Australian rival IBA Health in 2007. |
| Three years earlier, iSoft had secured a gagging order against the Guardian preventing publication of an article on the company’s accounting practices. At the time, iSoft had told the Guardian any planned article would be based on a leaked confidential document that contained inaccuracies and did not tell the whole picture. | Three years earlier, iSoft had secured a gagging order against the Guardian preventing publication of an article on the company’s accounting practices. At the time, iSoft had told the Guardian any planned article would be based on a leaked confidential document that contained inaccuracies and did not tell the whole picture. |
| In 2010, Cryne, along with Tim Whiston, John Whelan and iSoft’s chief operating officer Steve Graham, was charged with conspiracy to mislead investors by the FCA in a rare use of the regulator’s powers to bring criminal cases. All denied wrongdoing — and were eventually cleared when the trial collapsed. Only Whiston, Whelan and Graham appeared in the dock at trial three years later. The case against Cryne had been delayed because of his poor health at the time. | |
| Prosecutors for the FCA claimed in court that there had been a forgery plot, orchestrated to create the illusion of a big contract win in Ireland. Although terms had been agreed on the proposed Irish contract, the deal could not be signed in time for a financial reporting deadline iSoft faced in the autumn of 2003. Instead evidence of a completed contract was forged, prosecutors alleged. | Prosecutors for the FCA claimed in court that there had been a forgery plot, orchestrated to create the illusion of a big contract win in Ireland. Although terms had been agreed on the proposed Irish contract, the deal could not be signed in time for a financial reporting deadline iSoft faced in the autumn of 2003. Instead evidence of a completed contract was forged, prosecutors alleged. |
| When investigators eventually searched iSoft offices they found a box containing what the court was told was a “forgery kit”. During the trial, however, it emerged prosecution records of exactly where the box had been found were confused. The trial collapsed, with the judge clearing the trial defendants and Cryne. | When investigators eventually searched iSoft offices they found a box containing what the court was told was a “forgery kit”. During the trial, however, it emerged prosecution records of exactly where the box had been found were confused. The trial collapsed, with the judge clearing the trial defendants and Cryne. |
| At the time Tracey McDermott, FCA director of enforcement and financial crime, described it as a “disappointing outcome”, adding “we will look to see what lessons can be learned for the future”. | At the time Tracey McDermott, FCA director of enforcement and financial crime, described it as a “disappointing outcome”, adding “we will look to see what lessons can be learned for the future”. |
| Shortly after the trial collapsed, the FRC unsealed details of a past disciplinary action against iSoft’s former auditor RSM Robson Rhodes, laying bare a catalogue of accounting failures that had misled investors between 2003 and 2005. The FRC findings against RSM Robson Rhodes went beyond the narrow focus of the single Irish healthcare IT contract that had formed the basis of the FCA’s failed prosecution. | Shortly after the trial collapsed, the FRC unsealed details of a past disciplinary action against iSoft’s former auditor RSM Robson Rhodes, laying bare a catalogue of accounting failures that had misled investors between 2003 and 2005. The FRC findings against RSM Robson Rhodes went beyond the narrow focus of the single Irish healthcare IT contract that had formed the basis of the FCA’s failed prosecution. |
| The FRC’s conclusions made clear iSoft had been misleading investors about revenues from British health service contracts with the NHS in 2003 and 2004, including a period when the Guardian had begun to question whether iSoft was misrepresenting its NHS contract revenues. | The FRC’s conclusions made clear iSoft had been misleading investors about revenues from British health service contracts with the NHS in 2003 and 2004, including a period when the Guardian had begun to question whether iSoft was misrepresenting its NHS contract revenues. |